Spot market activity often reveals the well-being of the freight industry as a whole — a fact reiterated throughout 2020 as shortages in airfreight capacity, containers and semiconductors forced shippers to buy capacity and rely more heavily on the spot market. Capacity shortages coupled with fast fluctuations in demand put the entire global supply chain under pressure.
There’s a positive correlation between the rate at which carriers reject load requests from shippers (tender rejection rates) and spot rate movement. When carriers reject contract loads at a higher frequency, it means their services are in higher demand and they aren’t able to service customers to their satisfaction.
The trend of tender rejections moving from an average of 5% in 2019 to over 25% in 2020 indicates spot volumes potentially sitting above 20%, compared to 2-5% in 2019.
As shippers have sought more and more capacity from the spot market, they have discovered another problem along the way: the lack of automation for spot-buy freight.
Spot-buy management is not often a part of a shipper’s TMS, as it requires a more agile platform.
Because of this, Cargobase, the Singapore-based leading spot-buy platform, has seen strong and persistent year-over-year growth in 2020 across freight volumes (+119%), transactions (+47%) and revenues (+81%). This trend continues into 2021.
“We have seen very strong growth in the European market, which now makes up 30% of our global volume,” said Wiebe Helder, CEO at Cargobase. “We expect to grow our volumes in Europe alone by at least fivefold this year with our newly closed deals and brand new sales team in our Amsterdam office.”
With this growth and expansion into both Asia and Europe, Cargobase expects to more than triple its revenues in 2021 compared to 2020, driven by both existing customers adopting the platform across additional locations as well as a fast-growing pipeline of prospective shippers.
“Whereas the bulk of Cargobase’s revenues have thus far come from the automotive and semiconductor industry, the interest is now also coming from segments who have historically had less uptake of spot buy freight such as pharmaceuticals, health care and perishable goods,” said Helder.
Cargobase’s solutions surpass freight procurement into analytics, invoicing and auditing, freight management, rich data, track and trace, and publishing pandemic trends and intelligence.
To help enterprise shippers navigate 2021’s supply chain, Cargobase is working on new features, like a flexible freight tender feature, last-mile GPS tracking, advanced data visualization options and new APIs for both shippers and logistics providers.